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Sosandar’s revenue rose by 9% to £46.3m in the financial year ended 31 March, as the company prioritised margin enhancement and profitability.
The company experienced its largest quarter of revenue ever in Q3, with revenue up 23% against Q3 FY23. Q4 was also “strong”, resulting in H2 being “well ahead” of last year despite the reduction during the period in price promotional activity which drives incremental revenue.
During the period, the women’s brand improved its gross margin to 57.6%, up from 56.2% in FY23. Gross margin for the second half was 59.6%, up from 57.8% in the prior year. The retailer attributed this improvement to the focus on reducing the levels of price promotional activity on its own website, improved supplier cost prices and further efficiencies in inbound freight costs.
Demonstrating the impact of increased revenue and gross margin, H2 FY24 saw the group deliver what it called a “substantial uplift” in profitability, of £1.0m, following a £1.3m loss in H1 FY24. Combined, this resulted in a loss before tax of £0.3m for the full year.
So far in Q1 FY25, the company has said that gross margin and pre-tax profit level have been “highly encouraging”. The retailer has also recently signed the first two Sosandar stores in Marlow and Chelmsford, which are both expected to open in September.
It now estimates that revenues for the year ahead will reach £54.6m and PBT of £1m.
Ali Hall and Julie Lavington, co-CEOs, said: “We have delivered a robust financial performance for FY24, delivering a profitable second half, accelerating revenue growth whilst at the same time growing our margin and generating cash.
“To meet our strategic goal of delivering a pre-tax profit margin of at least 10% in the medium term and £100m+ revenues, we have refined our focus and built a roadmap that will shape our decision making over the coming years. The core ingredients to this include prioritising margin and sustainable profitable growth rather than revenue growth through promotional activity.”
They added: “Looking ahead, FY25 is focused primarily on delivering sustainable growth in our gross margin, pre-tax profit, cash generation and maintaining a strong balance sheet. Nonetheless, we do expect revenue growth from on our own site, further third party partnerships, opening shops and the compounding positive effect that the shops will have across all our channels.
“We believe that the future is very bright as we take the Sosandar brand to more customers across the UK and worldwide, as we move forward towards reaching our strategic goal in the medium term.”
